Russian Deputy Minister of Energy Pavel Sorokin comments on alternative energy issues
«The infrastructure for alternative energy has not yet been fully created.
There is no storage system, there are no options for storing energy obtained from renewable sources. For example, networks are not always ready to accept a large number of electric vehicles.
In California, for example, at peak loads, the ability to charge electric vehicles is limited. Networks in most countries were built a long time ago, and they simply cannot withstand the additional load. Very large investments, estimated in trillions of dollars, are required before unconventional, alternative energy can take a significant market share. But now there are factors of hype, political populism and, unfortunately, cases of complete distortion of economic reality due to zero tax rates, which is also used to Finance renewable energy sources (RES) in the Western world. As a result, projects that in the real economy simply would not even have the opportunity to appear, live and thrive. This is facilitated by the virtually unlimited availability of capital at low rates, which inflates a large number of financial bubbles that may actually exist for a long time, but eventually burst, especially during periods of instability».
But after all, over the past ten years, renewable energy sources have become very widespread, haven’t they?
Pavel Sorokin: «If something promising, but unprofitable, is being done for 10, 15, 20 years, and at the same time financing continues, then at some stage, when large production volumes are achieved and the necessary technologies are brought to mind, it can become profitable. We have seen this, for example, in renewable energy sector, when it was brought to a competitive state in a large number of positions due to artificial support measures. For example, the sun and wind energetics. But again, there are no drives yet to take the next step in this direction. Therefore, summing up what has been said, it seems to me too early to bury hydrocarbons. Now it is the Foundation of global energy – something that can provide fast, guaranteed and affordable energy to a growing economy. However, it is important to understand that competition in the market will escalate. And the rent, the income that is present in this sector today, will decrease up to the minimum values. All manufacturers, without exception, will have to significantly increase efficiency. This means that the current excess profits and additional tax revenues will gradually disappear. And this is inevitable».
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